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Women and e-commerce in Africa: The $15 billion opportunity

In News

Given that Africa’s internet economy could reach $180 billion by 2025 alone, we at International Finance Corporation (IFC) were keen to examine whether e-commerce platforms support women entrepreneurs, or whether such tools remain stymied by women’s low access to the internet, mobile phone, and other fundamental tools of the digital economy. Combining vendor surveys and performance data from one of Africa’s largest e-commerce platforms, Jumia, we produced the first regional view into women’s challenges and successes in e-commerce and found that closing gender gaps in this arena could add nearly $15 billion to the value of Africa’s e-commerce industry between 2025-2030 alone—putting billions in the hands of women entrepreneurs.

WOMEN ARE ACTIVE PARTICIPANTS IN E-COMMERCE Women own between one-third (in Côte d’Ivoire) and just over half (in Kenya and Nigeria) of companies on Jumia. Encouragingly, there are signs e-commerce is supporting women in overcoming gender barriers: For instance, such platforms offer an entry point for women in new and larger markets or high-profit, male-dominated sectors like electronics. Notably, however, the COVID-19 pandemic reversed or stunted many of these early successes: Women’s sales fell by 7 percent; over the same period, men’s rose by an equal amount.

 

ENSURING THE DIGITAL ECONOMY IS AN INCLUSIVE ECONOMY Both the private and the public sector can ensure women grow and thrive in Africa’s still nascent e-commerce industry. Key opportunities for action include: Targeting women with fintech: Just 7 percent of women-owned businesses received a loan through the Jumia platform upon start-up. Fintech platforms should target women who are already less likely to have access to finance elsewhere, but who could use sales history on platforms to provide proof of income. Recruiting from social commerce: Women vendors are more likely than men to use social commerce tools like WhatsApp—and this is where many women get their start selling online. Supporting women’s transition to a platform with increased support can help them grow and formalize their business. Training, training, training: Women are less likely than men to use advertising and other paid features that allow them to stand out in a crowded market. But they also value training more—even when their self-reported skills match or exceed men’s. Platforms can recruit women by offering training on entrepreneurship and digital skills. Disruptive technologies too often reinforce, rather than reduce, inequalities.

 

However, prior to COVID-19, women were beginning to thrive online. Action now can reverse the pandemic’s impacts and ensure that women entrepreneurs can lead the future of Africa’s digital economy.

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